Piper Jaffray: Apple’s Stability May Hinge On New Macs

7:29 am, October 7th, 2008, Ed Sutherland

Apple’s fourth quarter results later this month may be one of the most widely-awaited events since the Vice Presidential debates.

After the stock whipsawed on analyst downgrades then health rumors surrounding CEO Steve Jobs, investment analysts now suggest Apple must either report strong sales or announce new products.

If Apple does not report healthy sales of Macs during the September quarter, “the importance of the new Mac increases substantially,” Piper Jaffray analyst Gene Munster told Cult of Mac Tuesday.

Munster, the investment research firm’s lead Apple watcher, held to his expectation Apple will announce redesigned MacBooks, including a sub-$1,000 Mac.

In a note to investor, Munster wrote the likelihood of such a product refresher increased after Apple provided guidance of a 31.5 percent gross margin due to upcoming “new, lower-margin products.”

“The product changes we have seen thus far do not warrant such a dramatic decrease in margins,” the analyst said. Piper Jaffray expects a 32 percent gross margin for September.

Although Apple announced new iPod nanos plus lower-cost iPod Touch for the back-to-school period, the cuts came amidst lower NAND memory prices. Munster called concern over Apple’s lower margins “overestimated.”

Earlier this month, Barclay’s reduced its target price for Apple shares, citing an “obvious economic weakness.” Like Munster, Barclays’ analyst Ben Reitzes believes a “less-expensive” device could help Apple’s marketshare.

Additionally, Munster described as “conservative” Apple’s guidance for 31 percent gross margins in September. That number is being used to reign in Wall Street’s exuberant expectations for Q4 and the December quarter, the investment analyst said.

Apple appears to historically issue gross margin guidance that is far below the actual figures reported. The Cupertino, Calif. company had said the June quarter would have gross margins of 31.5 percent, when later the figure was reported at 34.8 percent.

On Monday, a volunteer effort estimated Apple sold around 7.5 million iPhones in the fourth quarter, far beyond analysts’ predictions of 5 million.

Posted by Ed Sutherland in Apple, News | Comment on this article